Domestic Political Situation

The conservative party, Saenuri, with Park Geun-hye as leader won the December 2012 presidential election. President Park’s presidency is set to the background of a number of major challenges including lower economic growth rates, an ageing population and increasing expectations to welfare policies. Recently, the ruling party has been challenged with inefficiency in the political system as a result of the Sewol tragedy which occurred on April 16th 2014. President Park’s economic growth agenda includes creating a fair society balancing the economic power of the large family owned conglomerates and the need to sustain and develop small and medium sized enterprises and greater entrepreneurship. While maintaining the green and sustainable growth agenda of previous president Lee Myung-bak, her economic policy is focused on developing a creative economy fostering creativity and innovation as cornerstones of the Korean economy and society.

Economic Situation

South Korea is one of the greatest economic success stories of our time. Despite the human disaster and destruction of the Korean War (1950-1953), South Korea has managed to create one of the most dynamic economies in the world. Founded on Confucian virtues of education, discipline and hard work, and through close ties between state and industry, South Korea has managed to maintain consistently high economic growth rates (average on 9 per cent annually after 1960). From being one of the poorest countries in the world, South Korea is now the 4th largest economy in Asia and the 11th largest in the world (according to IMF, 2016) with a GDP pr. capita in absolute values approximately 27.633 USD (53.243 USD in Denmark) and narrowing the gap in terms of actual purchasing power.

The export driven Korean economy is characterized by a high degree of cooperation and coordination between state and private enterprise. The Korean economy is further characterized by a range of family owned business conglomerates – so called “chaebols” – which make up the core of the South Korean export economy and global brands in their respective sectors (Hyundai, Samsung, LG, Kia, Daewoo etc.). Today, Korea is one of the countries in the OECD that spends the largest proportions of GDP on research and development.

Inter-Korean Relations

The predominant foreign policy priority for South Korea is the relationship to the Democratic People’s Republic of Korea (DPRK), maintaining peace on the peninsula and containing the DPRK’s nuclear and ballistic programmes. The so-called “Six Party Talks”, which include USA, China, Japan, Russia and the two Koreas have not resumed since DPRK withdrew from the negotiations in 2009. DPRK has since resumed its nuclear weapons programme and conducted several nuclear tests in disregard of global condemnation and sanctions.

The situation on the Korean Peninsula remains tense with little prospect of progress in the short run.

Global Korea

South Korea is increasingly active on the international political and economic scene in the UN, WTO, OECD and other organizations, which includes growing overseas development assistance aid exemplified by South Koreas entry into OECD’s committee for developmental aid (DAC) per January 1st 2010. South Koreans head the World Bank. South Korea is also active in G20, which has played an increasingly important role since the onset of the global financial crisis. In March 2012, South Korea also hosted the Nuclear Security Summit and will host the 2018 Winter Olympics in Pyongchang.

Bilaterally, South Korea has signed Free Trade Agreements (FTA) with the US, EU, Australia, India, Chile, Singapore, Peru, EFTA, ASEAN, Turkey, Canada, China, New Zealand, Vietnam and Colombia as well as initiated negotiations with a range of other countries, including China, Japan, Israel etc.

Bilateral Relations

The relationship between Denmark and South Korea is characterized by increasingly close relations. Denmark was the first country – and remains one of only two – in the EU to enter into a Strategic Partnership with South Korea. The agreement was signed during the State Visit to Demark by former South Korean President Lee Myung-bak in May 2011, which also saw the establishment of the Danish-Korean Green Growth Alliance. Since then, the alliance has met annually. In March 2014, the 4th meeting was held in Korea under the theme “Green ship and maritime industry, sustainable energy and energy efficiency”.

In October 2016, the Danish Prime Minister paid an official visit to Korea accompanied by 25 top Danish business leaders, organisations, universities and the Lord Mayor of Copenhagen. The Prime Minister met with President Park Geun-hye, adopting an Action Plan for 2016-2019 strengthening the strategic partnership. This was the first Danish Prime Minister’s official visit to Korea since March 2012 in connection with the Nuclear Security Summit, following former South Korean President Lee Myung-bak’s visit to Greenland in September 2012. The Lord Mayor of Copenhagen, during his visit in 2016, met with the Mayor of Seoul for the official unveiling ceremony of the Little Mermaid statue replica at the Yeouido Hangang Park. Previously in 2014, Seoul Mayor Park Won-soon had visited Copenhagen and Odense and signed cooperation agreements with the two cities. The agreements touched upon a variety of topics ranging from cultural exchanges, promoting tourism, sports and information technology to liveability and green solutions.

Today Korea is Denmark’s 16th largest export market globally and the 4th largest market in Asia with exports in 2015 reaching 6.4 billion DKK. The total amount of exports to Korea has increased by more than 60% since 2011. The increase in exports is believed to be a result of one the one hand the Danish government’s Growth Market Strategy for Korea focusing on greater economic and research engagement and on the other hand the implementation in 2011 of the EU Korea Free Trade Agreement (FTA).